Why Vodafone is a ‘buy’ for income seekers

Income investors should consider buying Vodafone, one of the fastest growing broadband providers in Europe, according to Helal Miah, investment research analyst at The Share Centre.

“Mobile telecommunications company, Vodafone, is my share of the week this week as data demand continues to grow,” he says. “The group’s data services now represent 15% of revenues and forms a core part of its strategy. Furthermore, interested investors should appreciate that the uptake of 4G services is encouraging as outdoor coverage in Europe has increased to around 90%.

'Dividend yield makes Vodafone attractive for income seekers'

Mr Miah adds: “With emerging markets continuing to experience steady growth, a strategic partnership with Asian mobile alliance, Conexus, should increase the group’s presence in Asia. Vodafone continues to seek new areas of potential growth for its business and we believe to further drive business forward it needs to offer quadplay services (telephone, TV, broadband and mobile) as similar to its competitors. It has already signed partnerships in some countries for these services and investors should expect more deals to come in the future.

“Investors should note that the good dividend yield should make this an attractive stock for income seekers willing to take on a low to medium level of risk. We therefore recommend Vodafone as a ‘Buy’.”

At the time of writing on 12 June, Vodafone was trading at 223p and its dividend yield was 5.123p, according to Interactive Investor data. Last week, on 6 June, it was trading at 230.55p. Its share price has risen from 192.5p on Thursday 26 January 2017.